Paraguay’s central bank says it returned deposits to 1.2 million account holders after Ueno Bank intervention

Paraguay’s central bank says it has returned the equivalent of about R$ 880 million to depositors after the intervention at Ueno Bank, the country’s largest digital bank and main credit card issuer. For high-risk PSPs, the important part is not the headline number alone, but the mechanism: payouts came from the Deposit Guarantee Fund, while the bank remains under scrutiny and officials are still dealing with deposit balances above the covered limit.

1. According to the balance presented at a press conference at Palacio López, after an emergency meeting between interim president Pedro Alliana, the ministers of Economy and Finance, and BCP management, the authorities said money had been returned to the equivalent of about R$ 880 million. The ministry said it had mobilized “all fronts” to respond quickly to the crisis and calm affected savers.
2. The funds came from the Deposit Guarantee Fund, a strategic reserve maintained by the Central Bank specifically to protect savers in cases of bank failure or intervention. BCP interim president Pedro Acosta said the bank is still reviewing alternatives for depositors whose balances exceeded the guaranteed limit.
3. The intervention at Ueno Bank matters because the institution is not a niche player: it is described as Paraguay’s largest digital bank, the country’s main credit card issuer, and a bank with about 3 million customers. The central bank moved after balance-sheet adjustments pushed its solvency ratio — the indicator used to measure a financial institution’s ability to meet its obligations — to less than half of the regulatory minimum.
4. The authorities also moved to contain spillover risk. The Central Bank of Paraguay started a process to protect depositors and prevent the problems from spreading to other financial institutions, while the Public Prosecutor’s Office requested a criminal investigation and ordered the arrest of eight people linked to the bank. In total, 27 people are under investigation for suspected fraud and estelionato.
5. The fallout is not limited to retail deposits. The press conference also covered the Instituto de Seguridade Social (IPS), Paraguay’s main social security body. Its president, Derlis León, said the next monthly pension payment will be deposited normally on November 17. About 32,000 retirees out of 90,000 had been receiving benefits through Banco Ueno, and final steps are being completed to move those accounts to eight other local banks.

The case also has a political angle. Carlos Carvallo, who had led the Central Bank and had previously headed Ueno until August 2023, resigned on Tuesday (3) as the situation escalated.